BABY STEPS - STEP 3 OF A 3 STEP ACTION PLAN FOR MANAGING CASH

"Gross revenue means nothing if, at the end of the day, you have no operating cash." ~ MIKE MICHALOWIZ

For a good twenty plus years, I managed cash daily, weekly, monthly and quarterly at the privately held companies I worked for.  Consistently working cash flow so we were prepared for anything.

Step three for managing cash is using a 52-week cash flow projections.

This is a 52 week spreadsheet that tracks cash receivables coming in and cash payables going out. Cash Receivables are listed at the top. You can create a variety of categories for cash coming in.  Examples, receivables from various areas of the business, coaching, products,, events, and seminars, etc.  Cash going out categories, inventory, then list your various vendors if that is how you want to track purchases. Commissions, payments to contractors, weekly or bi-weekly payroll, plus normal monthly expenses, rent, utilities, electricity, natural gas, phone, internet, water, lease payments, car payments.  The 52 week cash flow spreadsheet is a cash story book, it tells you where you have been, how you performed and the variances that have occurred, which will allow you to realign how you are managing cash.  At the end of the spread sheet it tells you if there is lots of cash left over for the following week, or not enough to cover you, so then you can plan to borrow or adjust what will go out.

Why manage cash weekly? This is the path that provides knowledge and direction for your financial goals for your business and life. This is a tool used to see where you are and where you are heading at all times. Knowledge is power. Mapping out cash coming in and going out weekly, allows you to see and plan what is needed.

A question I am constantly asked - Why do I need to manage cash flow daily when I use QuickBooks.?

Great question - the answer - CASH is KING. Cash is worked daily, weekly, monthly, quarterly and annually.  Cash is the lifeblood of every business. If you don't manage the cash coming in from accounts receivable and going out, accounts payable you run the risk of putting yourself out of business.  When you don't manage sales and accounts receivable you run the risk of missing income. (See previous post ) If you are not managing your expenses. i.e. accounts payable you can run the risk of negative circumstances where you have to scramble.  The numbers are only information, with that information, you make choices and decisions how to move forward.

Business's fail with poor cash flow management, so why run the risk?

As I have shared in earlier posts, create that new muscle, a new habit and learn how to work your cash flow differently.  Cash happens right now, in this very moment when you receive a payment or are purchasing goods or services. Working cash daily and weekly forces you to look at and plan.  You are the CEO of your business and the CFO. Lead your finances as you lead your business.

Remember, CASH is KING, so you need to know where you are at all times.

Creating simple, easy baby step habits opens the door to new possibilities for you and your business.

Get in to action, and get cracking on managing your cash every single freaking day. Do you get my drift.  Your business will grow, grow, grow and so will you when you manage what matters.  CASH is KING!  If you have any questions or need help with managing your cash, reach out and ask for help, e-mail me at d.rosenfelt@cfomadeeasy.com to set up an appointment to discuss your needs.


Warmly -
Debbie Rosenfelt
President / CFO / Leader-of-the-Heart

BABY STEPS - STEP 2 OF A 3 STEP ACTION PLAN FOR MANAGING CASH

For a good twenty years, I managed cash daily, weekly, monthly and quarterly at privately held companies I worked for.  Consistently working cash flow so we were prepared for anything.

Step two for managing cash is using a weekly cash management tool.

This is a 52 week spreadsheet that tracks cash flow going in and coming out of your bank accounts. General checking, payroll account (If you have a separate account) savings account, and line of credit. In addition, this spreadsheet tracks accounts receivable, account payable and any credit card debt you may carry. 

Using this tool will have you looking at your accounts consistently and the tool allows you to manage and plan, when you need borrow from a line of credit, pay down the line, and or transfer money into savings.
For the gym, we have a savings account and we sock $500 to $1000 each month to cover the semi-annual real estate property taxes.  In addition, if there is more than enough we will put additional funds aside to cover new equipment for the gym.


Why manage cash weekly? This is the path that provides knowledge and direction for your financial goals for your business. This is so you know where you have been, where you are and see where you are heading at all times. Knowledge is power. Mapping out cash coming in and going out weekly, allows you to see and plan what is needed.


A question I am constantly asked - Why do I need to manage cash flow daily when I use QuickBooks.?


Great question - the answer - CASH is KING. Cash is worked daily, weekly, monthly, and quarterly.  Cash is the lifeblood of every business. If you don't manage the cash coming in from accounts receivable and going out, accounts payable you run the risk of putting yourself out of business.  When you don't manage sales and accounts receivable you run the risk of missing income. (See previous post ) If you are not managing your expenses. i.e. accounts payable you can run the risk of negative circumstances where you have to scramble.  The numbers are only information, with that information, you make choices and decisions how to move forward.


A short story about cash flow. Back in 2008 I was working with a company that sold goods wholesale to large retailers.  There was one company that we had to constantly monitor as there were rumbles of bankruptcy in the air. Frightening, especially when there was over $500k in outstanding receivables. They continued to make promises to pay, however at the end of June we were notified they filed for bankruptcy protection. 


The good news, we had one advantage, our product the business was selling, was their best seller. They needed our product.  I immediately created a letter to the President of the company that filed bankruptcy stating all sales will be paid in advance by a wire. The President agreed. How did we do with cash flow? The cash sales from the bankrupt company funded our growth as the business grew 74% that year. You need cash to grow.


Your business will fail with poor cash flow management, so why run the risk?

Create that new muscle, a new habit and learn how to work your cash flow differently.  Cash happens right now, in this very moment when you receive a payment or are purchasing goods or services. Working cash daily and weekly forces you to look at and plan.  You are the CEO of your business and the CFO. Lead your finances as you lead your business.


Remember, CASH is KING, so you need to know where you are at all times.Creating simple, easy baby step habits opens the door to new possibilities for you and your business.

Next is step three - Cash Flow Management - Planning and mapping out sales i.e accounts receivable, expenses, i.e. accounts payable and credit card debt weekly.


Get in to action, and get cracking on managing your cash daily. If you have any questions or need help with managing your cash, reach out and ask for help, e-mail me at d.rosenfelt@cfomadeeasy.com to set up an appointment to discuss your needs.

Warmly -


Debbie Rosenfelt
President/CFO

BABY STEPS - STEP 1 OF A 3 STEP ACTION PLAN FOR MANAGING CASH

I was reminded back in the summer of 2012 in a blog post by Jeff Walker, creating success happens in baby steps.  I needed that reminder today, to remind myself I am on a journey to building my business and it doesn't happen overnight . . although I would LOVE the success to happen yesterday. A heartfelt YES, and you?

So I thought, why not create a post that supports you the leader, entrepreneur, business owner, CEO, a baby step action plan for managing the heart of your business, cash.

Step #1 - Manage cash daily. 

How you ask?

With the daily, 12 month cash register.

Why manage cash daily? This is the path that provides direction for your financial goals for your business. This is so you know where you are at all times, and so you see where you are heading. Mapping out cash coming in and going out daily, allows you to see and plan what is needed. You know when monthly recurring bills and loan payments happen, so map it out and plan how much cash you need daily..

A question I am constantly asked - Why do I need to manage cash flow daily when I use QuickBooks.?

Great question - the answer - CASH is KING. Cash is worked daily, you need to know how much cash you have on hand at all times. YES, that means creating a new muscle, a new habit if you want to figure out how to work your cash flow differently.  Cash happens right now, in this very moment when you receive a payment or are purchasing goods or services. Working cash daily forces you to look at and think of what is coming up next. If it is next week, the end of the month, next month or next quarter, etc.

When I was working with the privately held corporations, as the CFO I worked and planned cash daily, always looking at each day, each week, each month and each year. My team worked on and updated the financials in the accounting software used. AR, AP, monthly transactions, etc were worked on thru out the month.  Cash and financials are two different animals, cash is cash and financials are the whole picture of the financial story for the business.

Even now, with our gym business, we manage cash daily with the daily cash register. IT's like a checkbook in Excel, that holds 12 months of info in one workbook. Each month has it's own tab, and each worksheet is linked to the next. Every day we look at cash and manage it daily. Each day's deposits are mapped out and updated daily at the end of the day or the next morning. Recurring payments such as payroll, trainers commissions, monthly loan payments, purchasing supplies and advertising. By doing this we are able to make a decision how much to transfer to savings each month.  We put aside the bi-annual property tax payments or plan for additional equipment purchases.  I also balance the bank statement to the daily cash register which is a check and balance system for balancing cash to QuickBooks at the end of the month.

Remember, CASH is KING, so you need to know where you are at all times.

Creating simple, easy baby step habits opens the door to new possibilities for you and your business.

Next, I will share step two - Managing cash weekly with the cash management register.

Get in to action, and get cracking on managing your cash daily. If you have any questions or need help with managing your cash, reach out and ask for help, e-mail me at d.rosenfelt@cfomadeeasy.com to set up an appointment to discuss your needs.

Warmly -


Debbie Rosenfelt MBA CPCC
President / CFO.